# In the matter of Sandhya Prakash Ltd. CP No. 113-7-NCLT-AHM-2017

> NCLT judgment dated 2017-09-14. Citation: TCN-2017-NCLT-00412. JM Financial Asset Reconstruction Company Limited filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 14 Sept 2017
- **Citation:** TCN-2017-NCLT-00412
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sandhya-prakash-ltd-cp-no-113-7-nclt-ahm-2017-6553408f

## Summary

### Background

JM Financial Asset Reconstruction Company Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process against Sandhya Prakash Limited, treating it as the Corporate Debtor. The application was based on the Corporate Debtor's failure to repay loans obtained from HUDCO and Dena Bank, which were subsequently assigned to JM Financial. The Financial Creditor also granted additional financial assistance to the Corporate Debtor. The Corporate Debtor acknowledged its inability to meet loan obligations and requested restructuring. The Financial Creditor initiated measures under the SARFAESI Act, leading to the current application before the NCLT.

## Facts

JM Financial Asset Reconstruction Company Limited (the Applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Sandhya Prakash Limited (the Respondent), the Corporate Debtor. The Respondent initially obtained loans from Housing and Urban Development Corporation Limited (HUDCO) and Dena Bank, which were later assigned to the Applicant. The Applicant also provided additional loans to the Respondent. The loans were secured by hypothecation, mortgage, personal guarantees, and corporate guarantees. The Respondent defaulted on the repayment of the loans. The Applicant initiated measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority has the jurisdiction to entertain the application under Section …

**Ratio:** Section 60(1) of the IB Code states that the Adjudicating Authority for insolvency

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**Reasoning:** The Adjudicating Authority considered the Corporate Debtor's argument that the agreements

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**Interpretation:** The interpretation of Section 60(1) of the IB Code clarifies that the location

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**Application:** In this case, the Corporate Debtor's registered office is located in Bhopal,

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** JM Financial…
- **Respondents:** Sandhya Prakash…; Sandhya Prakash…

## Timeline

- **2008-04-04 — Loan Agre…**: A Loan Agreement dated 4th April, 2008 was executed between the Respondent, its Directors…
- **2008-04-28 — Hypothecati…**: The Term Loan of Rs. 18.50 Crores is secured by…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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